Video Game Consoles Are Routinely Sold Below Cost, and Games

question 169

Multiple Choice

Video game consoles are routinely sold below cost, and games are sold above cost. What would happen if someone figured out how to use the consoles as cost-effective, general-purpose, nongaming computers?

• A) People would buy the consoles as low-cost computers, never buy any games, and the console-maker would lose money.
• B) The console maker would make more money since it would sell more consoles.
• C) The console maker would lower the price on its consoles to sell more of them to a more elastic market.
• D) The price of games would rise.

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Definitions:

Goods

Tangible, movable personal property that can be measured and weighed; also known as chattels.

Non Est Factum

A plea asserting that an agreement is void because the signer was unaware of its essence due to deception or misunderstanding.

Illegality of Object

Refers to a principle in contract law that prohibits the enforcement of agreements that involve an illegal purpose or object.

Rescission

The legal act of cancelling or annulling a contract, returning all involved parties to their state prior to the contract's formation.